President William Ruto is eying over Ksh690 billion Kenyans have stashed in foreign banks across the world by offering a Diaspora Bond.
Foreign Affairs Cabinet Secretary Musalia Mudavadi, in a statement on Sunday, explained that the bond, which will be issued in Dollars, will accord Kenyans a chance to invest in the Kenyan Government.
He further revealed that the bond will be structured by the World Bank’s Multilateral Investment Guarantee Agency (MIGA) and Kenya’s National Treasury.
The revelation was made after Mudavadi met with MIGA’s Executive Vice President, Hiroshi Matano, during his US tour.
Prime cabinet secretary Musalia Mudavadi with delegates of the United States Development Finance Corporation (DFC) in Washington DC on February 1, 2024.
“We are working on a secure bond that will offer better returns than interest rates in the source markets for our Diaspora remittances,” The CS stated.
“The bond will enable the Government to diversify its public debt mix, reducing our exposure to costly commercial debt.”
MIGA speculated that Kenyans have saved Ksh690 million in foreign banks owing to the latest figures which indicated that a similar amount is remitted back to Kenya annually.
A diaspora bond is described as a bond issued outside of Kenya whose principal and coupon payments are made in US Dollars.
The new scheme shows Ruto’s seriousness in exploring alternative ways of funding his government after he opted out of a Ksh161 billion ($1 billion) syndicate loan offered by the Trade and Development Bank (TDB).
At the time, the Head of State argued that his administration was no longer counting on the bank to deliver the loan as earlier agreed on October 2023.
His rejection coincided with his call for the reform of Multilateral Development Banks, asking for increased concessional loans.
In mid-January, the Central Bank also announced that it was auctioning infrastructure bonds valued at Ksh70 billion to compliment his Diaspora Bond efforts.
President William Ruto speaking during the launch of the Open University of Kenya on August, 2023.